• EU approval for state aid obtained
• Funds of the Federal Republic of Germany and of the Federal State of Lower Saxony may therefore be disbursed

• Financing of low carbon steel production now close to finalization

Salzgitter. The EU Commission has notified the application of Salzgitter AG concerning the funding of the SALCOS® - Salzgitter Low CO2 Steelmaking transformation program and has therefore declared the state aid measures applied for to be compatible with European law. Another essential precondition for the granting of the requested national funding has thereby now been set in place. Following the signing of an administrative agreement on September 15, 2022 by Minister President Stephan Weil and State Secretary Stefan Wenzel (BMWK) to mark the commitment of the Federal State of Lower Saxony and the Federal Republic of Germany to promoting SALCOS®, the EU Commission's approval has also been obtained.

Pending a positive, conclusive review and decision by the national funding authorities, Salzgitter AG now assumes that, in accordance with the administrative agreement of September 15, 2022, the Federal Government and the Federal State of Lower Saxony will contribute up to € 700 million and up to € 300 million respectively to promoting SALCOS®. Together with the funds already approved by Salzgitter AG in an amount of € 723 million, this would thereby secure financing the first development stage of SALCOS® for implementation by the end of 2025.

As Gunnar Groebler, Chief Executive Officer of Salzgitter AG, stated: “We appreciate this vote of confidence on the part of policy makers. Substantial public funding and our own considerable funds enable us in our pioneering role to accelerate industrial decarbonization in Europe. Yesterday’s EU decision shows that we are on the right track with our “Salzgitter AG 2030”, and that we will stay the course also in difficult times.”

SALCOS® is aimed at converting steel production at Salzgitter into low carbon crude steel production in three stages over the period up until 2033. The first stage with a crude steel capacity of 1.9 million tons a year is scheduled to go live as early as the end of 2025. As part of the full transformation, two direct reduction plants and three electric arc furnaces will be built and will then incrementally replace the blast furnaces and converters. The transformation will enable the steel production that was formerly based on coking coal to be replaced by a new hydrogen-based route. Approximately 95 % of the annual carbon emissions totaling around 8 million tons are to be saved, thereby avoiding approximately 1 % of Germany’s carbon emissions.

Salzgitter AG contact:

Thorsten Möllmann

Head of Global Group Communications and Branding

Tel.: + 49 (0)5341 21 2300

email: moellmann.t@salzgitter-ag.de

www.salzgitter-ag.com

Olaf Reinecke

Global Group Spokesman

Tel.: +49 (0)5341 21 5350

email: reinecke.o@salzgitter-ag.de

www.salzgitter-ag.com

Salzgitter AG ranks as one of Germany’s leading steel and technology groups.

As a pioneer in the circular economy, we focus on sustainable innovation and on transforming products and processes in the business units of Steel Production, Steel Processing, Trading and Technology.

With our Salzgitter AG 2021" strategy and anchored in the principle of “Pioneering for Circular Solutions”, we are setting new benchmarks in the industry. Our aspirations are realized through strong initiatives and programs such as SALCOS^® - Salzgitter Low CO₂ Steelmaking. Through partnerships and in networks, we are actively driving the process of development towards a circular economy.

With around 25,000 employees worldwide at 150 national and international subsidiaries and associate companies, we live up to our global aims for growth, profitability and our pioneering position. In the financial year 2021, we generated external sales of around € 10 billion, with a crude steel capacity of 7 million.

More information is available at: People, Steel and Technology | Salzgitter AG (salzgitter-ag.com)